Another chapter has closed for Terraform Labs after the firm received approval from a bankruptcy court to close down its operations, according to reporting from Reuters.
Terraform, the firm behind the well-known algorithmic stablecoin Terra, estimated that it will pay about $184.5 million and $442.2 million to stakeholders as part of that bankruptcy, Reuters reported on Thursday.
The firm's wind down comes a few months after Terraform closed another chapter — its case brought by the U.S. Securities and Exchange Commission.
The SEC charged Terraform and co-founder Do Kwon in February 2023 over the algorithmic stablecoin Terra USD (UST), which collapsed a year earlier. The agency said the firm defrauded and misled investors. Ahead of the settlement, both sides were arguing over fine amounts. Lawyers for Terraform and Kwon said fines should be closer to $1 million, while the SEC has proposed them to pay $5.3 billion.
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In June, Terraform Labs agreed to pay $4.7 billion in fines in the U.S. District Court for the Southern District of New York. As part of that settlement, Terraform agreed to pay $3.58 billion in disgorgement, $420 million in a civil penalty and would block Kwon from becoming an officer or director of any public firm.
The SEC said it would get its claim after creditors were paid as part of the bankruptcy process.
"Under the liquidation terms of the Chapter 11 Plan that Terraform is required to propose, the SEC will recover on its claim after harmed investors and other general unsecured creditors recover in full. If all Terraform’s assets are distributed pursuant to such a plan, the SEC’s monetary remedies will be deemed satisfied," the agency said in settlement documents in June.
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